Major Energies Marketers Association of Nigeria (MEMAN) has highlighted a framework for ensuring fair pricing and a steady supply of fuel.
The association’s recommendation focuses on maintaining a balance between local production and strategic imports, all underpinned by strong regulation and market-driven competition.
Speaking at a quarterly webinar engagement organised by MEMAN, the association’s Executive Secretary/CEO, Clement Isong, stressed that a balanced approach, combining local refining with strategic imports, is essential for market stability.
Isong, who moderated the webinar, pointed out that it is risky to completely stop imports, adding that it is almost impossible for a single source to meet all of Nigeria’s needs exactly when and how marketers require. A balance of imports with local production, he said, is necessary to ensure fair pricing and supply stability nationwide.
“We cannot afford to shut out imports entirely, just as we cannot afford to neglect local production. A balanced approach will ensure that Nigerians benefit from fair prices and steady supply,” Isong stated.
He stated that logistical challenges, such as queuing at a single loading gantry, make it necessary for marketers to have alternatives, including imports, to keep their stations consistently stocked.
He argued that a market-driven system, where product flows and pricing are dictated by the market, will ultimately ensure efficiency and transparency. This includes the flexibility to import fuel when it makes economic sense to maintain price stability and supply adequacy for Nigerian consumers.
While reflecting on the need to maintain quality standards for petroleum products distributed across the country, Isong called on regulatory agencies such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to step up its role ensuring that Nigerian consumers get the best, adding that substandard products, especially those with high sulfur content are harmful to human health and damages engines of vehicles.
Currently, the Dangote Refinery, which has 650,000 barrels per day capacity, is the only facility supplying over 90 per cent of petrol to the domestic market, according to recent data released by the NMDPRA. Import has been drastically reduced as the downstream regulator has halted issuance of fresh licences for petrol importation, prioritizing increase in domestic production.
The webinar brought together key stakeholders in the energy sector who discussed refining processes, global oil price volatility and how it is affecting Nigeria and called for innovative strategies to adapt to the changing environment.
Speaking at the webinar, MEMAN chairman, Hubb Stokman, stated that allowing both local refining and imports in Nigeria’s downstream system can help in ensuring adequate supply of petroleum products.
On the suspension of import licences, Stokman said the current measure adopted by NMDPRA is a good one as the issuance of licences to import is based on assessment of market needs.
“I think what the NMDPRA does at the moment is very good. It (import) is scheduled on a needs basis,” he stated.
He cited NMDPRA’s report which said that Nigeria had over 30 days of stock availability of PMS, noting that it signifies “supply security.”
The MEMAN chairman acknowledged that the current global oil market volatility, caused by the Middle East crisis, has affected fuel prices in Nigeria. He said the outcome calls for sustainable distribution approach.
He revealed that major marketers have partnered with Dangote Refinery to ensure supply stability, especially in times of disruption of the distribution chain.
Her commended the Dangote Refinery for how it is responding to the changes in crude oil prices in the international market.
Also speaking, a partner at Zeta Advisory and Consulting, Joe Nwakwue, emphasized the need for healthy competition in supply of petroleum products to the Nigerian market.
He also reechoed the need to allow imports while encouraging local production to boost supply.
Nwakwue argued that allowing only one source of supply may not be good for the market.
According to him, imports are essential to act as a buffer, especially during periods of volatility, such as the recent Middle East crisis, or when local refineries face maintenance or operational outages.
While making a presentation, Vice President, Crude oil, Argus Media, James Gooder, said that just as Nigeria sells its premium crude in the international market, domestic refineries can consider buying cheaper crude for refining, arguing that it “makes economic sense.”
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X
